Meat Groups Line Up Against Ethanol Subsidies, User Fees

A broad coalition of 90 organizations including the American Meat Institute (AMI) sent a letter to Congress today urging leaders to let the refundable Volumetric Ethanol Excise Tax Credit (VEETC) expire and to resist calls for spending on infrastructure for conventional biofuels

Mar 01, 2011

A broad coalition of 90 organizations including the American Meat Institute (AMI) sent a letter to Congress today urging leaders to let the refundable Volumetric Ethanol Excise Tax Credit (VEETC) expire and to resist calls for spending on infrastructure for conventional biofuels.

“At a time of spiraling deficits, we do not believe Congress should continue subsidizing gasoline refiners for something that they are already required to do by the Renewable Fuels Standard,” the group wrote.

“Experts like the Congressional Budget Office and the Government Accountability Office have concluded that the subsidy is unnecessary, and leading economists agree that ending it would have little impact on ethanol production, prices or jobs,” the letter stated. The letter can be viewed at http://bit.ly/eKLah3.

A new Government Accountability Office report released today indicated that federal programs involving ethanol production may be wasting billions in taxpayer dollars due to overlap and duplication.

“The ethanol tax credit and the renewable fuels standard can be duplicative in stimulating domestic production and use of ethanol, and can result in substantial loss of revenue to the Treasury,” the GAO report noted.

In addition, the report highlights what GAO previously reported in August 2009 that, “Given the requirements of the fuel standard, the ethanol tax credit is largely unneeded today to ensure demand for domestic ethanol production.”

It is estimated $5.7 billion each year could be saved by eliminating duplicative federal efforts to increase ethanol production, the GAO report stated.